What’s Your #1 Retirement Mistake?
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By Tyson Thacker, Co-Founder, B.O.S.S. Retirement Solutions
Quick Summary
The question of when to claim Social Security sounds simple. The answer, for most people in their early 60s with substantial savings, is far more complicated than the brochures suggest. The "right" time to claim isn't just about your age or your health. It's about your tax situation, how your other assets are structured, what your spouse is entitled to, and whether an early claim could silently trigger a tax event that follows you for the rest of your life. This article walks you through what that decision really involves, and why getting it right could be worth hundreds of thousands of dollars over the course of your retirement.
If you'd like to see how Social Security timing fits into your complete retirement plan, our team at B.O.S.S. offers a personalized Social Security Maximization Analysis at no cost.
Meet David and Susan
The following is a composite case study based on the kinds of situations we work through regularly at B.O.S.S. Names and details are illustrative, not drawn from a specific client.
David is 63. He's spent 30 years in management for a mid-size manufacturing company, and he's been careful with money. He and his wife Susan have just over $3 million saved, spread across a traditional 401(k), a smaller Roth IRA, and a brokerage account they've been adding to for years. They have no significant revolving debt. Their lifestyle is comfortable, they travel, enjoy their home, and have been looking forward to retirement which they’ve decided is only three years away.
They're excited. Susan's planning a trip to Greece and Italy with their friends who retired two years ago and "couldn't be happier." And now there's a grandchild on the way, which has given both of them a new kind of urgency. They want to be present and free to help out and enjoy the new addition to the family.
It was actually the couple they plan to travel with, Jack and Marilyn, who sent them to us. Jack had come in a few years back thinking he had it figured out. He didn't, at least not completely. After working through his Social Security timing, his pre-tax/Roth balance, and a few targeted adjustments to his withdrawal strategy, Jack ended up in a meaningfully better position than if he'd just gone with his gut. He told David: "You have more saved than we did. Don't wing it."
David called us the next week. When we sat down together, David's first question was the one we hear most often:
"When should I start taking Social Security?"
The answer took about an hour to walk through. Here's a version of what we covered.
The Question Everyone Asks About Social Security
Most people frame Social Security timing as a simple breakeven math problem. Claim early at 62, get smaller checks for longer. Wait until 70, get bigger checks for fewer years. Find the crossover point, pick a side.
That framing misses almost everything that matters.
The question isn't just "when do I start?" The real questions are:
- How will Social Security income interact with my other income sources, and what will that do to my tax bill?
- How is my money currently structured, and does claiming early lock in a tax problem I could have avoided?
- What does my spouse's benefit look like, and how does my timing affect theirs?
- Are there things I can do between now and when I claim SS benefits that change the math entirely?
For David and Susan, all four of those questions had answers that changed what the right decision looked like.
The Timing Window for SS Benefits
Here's something that surprises a lot of people who come in with $2–3 million saved and a retirement date three to five years out:
The years between when you retire and when you claim Social Security can be some of the most financially valuable of your retirement, if you use them intentionally.
David plans to retire at 66. If he doesn't claim Social Security until 70, he has a four-year window where his taxable income could be dramatically lower than it's ever been in his adult life. No W-2. No business income. Just whatever he draws from his accounts.
That window is an opportunity. Every year in that window is a potential Roth conversion year, a chance to move money from his pre-tax 401(k) into a Roth IRA at a lower tax rate than he'd ever pay otherwise, and certainly lower than he'd pay once Social Security kicks in and his RMDs begin.
Miss that window, and it's gone. You can't go back.
The Tax Bomb That's Hiding in Plain Sight
David's $3 million is not all the same kind of money. The majority of it, roughly $2.1 million, is in his traditional 401(k). He's never paid taxes on a dollar of it.
That money isn't really $2.1 million. It's $2.1 million that the IRS has a claim on.
Most people understand this at some level, but they don't feel it until it hits them. Here's how it hits:
Required Minimum Distributions (RMDs) begin at age 73. The IRS requires you to start withdrawing from your pre-tax accounts whether you need the money or not. On a $2.1 million IRA, that's a forced distribution of roughly $80,000 in the first year, and it grows from there, because the balance typically keeps growing even as you withdraw.
Now add Social Security. If David claims at 70, he and Susan together might receive $65,000–$75,000 annually in combined benefits. That income doesn't disappear into a tax-free account, it shows up on a worksheet called the provisional income calculation, and depending on how much other income you have, up to 85% of your Social Security benefit can become taxable.
So you have: RMDs pushing taxable income up. Social Security partially taxed on top of that. Investment income from the brokerage account. And suddenly David, who spent decades being careful with money, is in a tax bracket in retirement that rivals the one he was in while he was working. Sometimes higher.
That's the tax bomb.
The good news: you can defuse a significant portion of it before it goes off, but only if you plan before you retire, not after.
Roth vs. Pre-Tax: Why the Balance Matters as Much as the Total
When most people spend their career saving for retirement, they optimize for the tax deduction they get today. Max out the 401(k), take the deduction, let it grow. That's not wrong, but it's incomplete.
What they're often not thinking about is what that account looks like in 25 years, when it's grown substantially, and the government requires them to start pulling money out.
The problem with an all pre-tax retirement is inflexibility. Every dollar you take out is ordinary income. There's no control over your tax bracket. You can't pull from a source that won't spike your income. You're at the mercy of whatever tax laws happen to be in effect when you need the money.
A Roth IRA solves that. Roth withdrawals are tax-free. They don't count toward provisional income. They don't trigger IRMAA surcharges on your Medicare premiums. They give you a lever to pull when you need income without adding to your taxable total.
For David, a meaningful Roth conversion strategy during his pre-retirement years and in that four-year gap between retirement and claiming Social Security could reduce his lifetime tax burden by a significant amount, and give him far more control over his income in his 70s and 80s.
The target isn't to have all your money in Roth accounts. The target is a balance, enough pre-tax to manage your income, enough Roth to give you flexibility, and a thoughtful plan for which bucket you draw from and when.
What Social Security Timing Actually Changes
Let's bring this back to David's original question.
There are three general claiming windows most people consider:
Claiming at 62 (early): You receive benefits immediately, but at a permanent reduction, as much as 30% less than your full retirement age benefit. For someone with David's level of savings, this often makes the least sense, because he doesn't need the income, and the reduction is permanent. It also means more taxable income during years when he might otherwise be converting pre-tax dollars to Roth at a lower rate.
Claiming at Full Retirement Age (FRA, 66 or 67 for most people David's age): This is the default that many people land on without much analysis. It's not necessarily wrong, but for someone with David's savings and tax situation, it's rarely optimal.
Claiming at 70: Each year you delay past FRA increases your benefit by 8%, guaranteed. For a healthy 63-year-old with $3 million in assets and a spouse who will likely survive him by several years, delaying to 70 is often the strategy that produces the highest lifetime income and the most meaningful survivor benefit for Susan.
But, and this is the important part, what David does with his assets between now and 70 determines how much of that benefit he actually gets to keep.
If he enters his 70s with most of his $2.1 million still sitting in a pre-tax 401(k), untouched, his RMDs will stack on top of his Social Security and push his provisional income well above the thresholds where 85% of benefits become taxable. He's effectively paying tax twice, once on the RMD, and once on the Social Security income that gets taxed because of the RMD.
If, instead, he uses the years between now and 70 to convert a meaningful portion of that pre-tax balance to Roth, at today's tax rates, in years when his income is manageable, the picture in his 70s looks very different.
What Social Security Timing Looked Like for David and Susan
After working through David's complete financial picture, here's the general direction their plan took shape:
Before retirement (ages 63–66): Continued 401(k) contributions where appropriate, with an eye toward not over-concentrating additional pre-tax dollars given the balance already there. Started mapping the Roth conversion runway.
The gap years (ages 66–70): David retires at 66, Susan at 67. Neither claims Social Security immediately. During this window, they live primarily on distributions from the taxable brokerage account, which are subject to capital gains rates, not ordinary income rates, and make controlled Roth conversions annually, staying deliberately below the income thresholds that would trigger IRMAA or push them into the next bracket.
Social Security at 70: David claims at 70. Susan coordinates her own benefit strategy to maximize the spousal and survivor benefit structure. Together, their guaranteed monthly income covers the majority of their lifestyle expenses, with Roth assets providing tax-free flexibility for the rest.
The result: A dramatically lower projected tax burden in their 70s and 80s, a more protected survivor benefit for Susan, and a retirement that has the structure to fund the life they actually want, including the Greece and Italy trip, visits with the grandchild, and the flexibility to enjoy it without watching every dollar.
The Three Questions to Answer Before You Decide When to Take Social Security
If you're in your early 60s and thinking about when to claim Social Security, here are the three questions that matter most:
1. How is your money structured? What percentage is in pre-tax accounts vs. Roth vs. taxable? The answer changes your strategy completely. Someone with $3 million, 70% pre-tax, needs a different plan than someone with the same balance spread more evenly.
2. Do you have a gap between retirement and claiming? If so, are you using it? The years between retirement and Social Security are among the most valuable planning windows available, for Roth conversions, tax bracket management, and IRMAA avoidance. They don't come back.
3. What does your spouse's benefit look like? This is one of the most underplanned pieces of Social Security. Spousal and survivor benefits can be significantly affected by the timing decisions you each make. In many couples, the higher earner should delay as long as possible, in part to maximize the survivor benefit for the spouse who lives longer.
These aren't questions that have generic answers. They're questions that require looking at your specific numbers, your account types, your health, your spouse's situation, and the income your plan is designed to produce.
What We Do at B.O.S.S. Retirement
B.O.S.S. Retirement Solutions is a fiduciary RIA, which means we're legally required to act in your interest, not ours. We don't earn commissions. We don't have a product to sell you. Our job is to help you build a plan that holds together across all the dimensions that matter: income, taxes, Social Security, healthcare, and legacy.
We work with families across Utah, Idaho, and Washington. We've helped more than 6,800 families think through exactly the kind of decision David and Susan are working through. We'd be glad to do the same for you.
If you're within five years of retirement and haven't had a conversation about Social Security timing and your tax structure, now is the right time.
👉 Schedule a free Social Security Maximization Analysis
About the Author
Tyson Thacker is Co-Founder and Managing Partner of B.O.S.S. Retirement Solutions and B.O.S.S. Retirement Advisors, a fiduciary RIA based in Lehi, Utah. Alongside his brother Ryan, Tyson has helped more than 6,800 families across Utah, Idaho, and Washington build retirement plans designed to last, addressing income, taxes, Social Security optimization, and long-term financial security. B.O.S.S. currently manages more than $1 billion in retirement assets across 11 office locations.
This article is for educational purposes only and does not constitute personalized financial, tax, or legal advice. Social Security rules and tax laws are subject to change. Individual results will vary based on personal circumstances. Consult a qualified financial professional before making any financial decisions. Advisory services offered through B.O.S.S. Retirement Advisors, LLC, an SEC-Registered Investment Advisor. Insurance products and services offered through B.O.S.S. Retirement Solutions. Our firm is not affiliated with the Social Security Administration, U.S. government, or any governmental agency.
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